The Recession's Unexpected Gift: Reviving Multigenerational Living

My wife and I got a notice from our management company this week; rent will be going up 10% next year. We live fairly well below our means, so it wasn't disastrous news, but any notice of such things always sends me down a mental rabbit hole. It usually ends with me getting irrationally worried about our family's finances.

At the peak of my worries, I thought back to my friend Gabriel, who helps run his family's organic coffee farm in Costa Rica. We are about the same age, and got married within weeks of each other. But his life seems far more laid-back and less fraught with financial uncertainty.

There's one key difference between my situation and Gabriel's: He lives with family, and though my wife and I recently moved back to the Midwest to be closer to ours, my parents are still 100 miles away. That led me to ponder: Would many of our financial anxieties disappear if we adopted a similar practice in America?

The short answer: Maybe. But the statistics below show that the phenomenon of multigenerational houses is making a strong rebound in America, and some of the benefits defy our common misconceptions of the living situation.

Is This Really a Phenomenon?

If you take a step back, it's actually not living in multigenerational houses that is the phenomenon. It was only in the years immediately following World War II that the now well-worn path of high school to college to independence and gainful employment really took hold. Even today, outside of the United States and parts of Western Europe, multigenerational households are the norm.

Nevertheless, the percentage of middle-aged adults living with their parents and children has been growing steadily in the United States since bottoming out in the late 1970s.
Though the living situation has gotten considerably more attention since the Great Recession forced many families to join together under the same roof, the trend was solidly in place long before the housing crisis hit its peak.

When one stops to think about the economic benefits that combining forces can have, you could be forgiven for wondering why we ever stopped the practice. Not only does living with grandparents -- many of whom own their houses outright -- allow for working adults to save more money for future expenses (like college), but it also provides a built-in network to help raise and look after children. With the cost of child care where it is right now (roughly $1,500 per month in Chicago, for example), those benefits are no small matter.

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The vast majority -- 83% -- of young adults who have moved back home for financial reasons say that the arrangement has led them to believe that they will soon be able to independently meet their economic needs.

Beyond Economics

But as many families are finding out, the arrangement is surprising both grandparents and their middle-aged children for how well it can work once ground rules have been set and there's been an adjustment period. As Dr. Georgia Witkin, a senior editor for Grandparents.com, notes, "Many grandparents tell us not only that they love having their family back under their roof; they also love being needed again. They say it brings purpose to their days, and meaning to their lives."

Witkin is not alone in her findings. The Pew Research Center recently found that in only 25% of the cases of multigenerational households did the relationships between family members deteriorate.
But if we remember that this shift was occurring long before the onset of the Great Recession, we can see that those who moved back in with parents for non-economic reasons are almost unanimous in their verdict of the move: A full 50% of adults say it improved familial relations, with only 8% saying it was detrimental.

Could This Really Work?

Of course, the situation isn't always ideal. If there isn't enough physical space, or if your values differ substantially from those of other family members, multigenerational living could be a recipe for disaster.

But it's hard to hear the words of Margaret Mead without thinking that she was onto something when she said: "Nobody has ever before asked the nuclear family to live all by itself in a box the way we do. With no relatives, no support, we've put it in an impossible situation."

It could be that light shown on the benefits of families living together will end up being the lasting, unexpected gift the Great Recession offered up to Americans.